Losses on investments in shares

Retireby40

bostonerimus said:

Retireby40 said:

Thrugelmir said:

Retireby40 said:

Thrugelmir said:

Retireby40 said:

DiamondLil said:

The op's first sentence reads "Over the past 12 months I've started investing in stocks using trading 212."

Not sure why posters arguing the point with @Retireby40 who states nothing more than that stated everywhere on this forum - investing is for the long term and not recommended for periods any shorter than five years, preferably ten years.

He/she is suggesting exactly the mantra repeated on here every day that 12 months is not long enough to make a judgement.

Thanks. That's exactly my point. There's going to be years where you are down 20%. Other years up 20%. It seems to me that the OP has probably started investing and feels like he should cut his losses.

When in reality he should probably hold and see what happens down the line.

If you are holding a stock that falls 20% then recovers 20%. You'll still be 4% down. To recover past losses the stock needs to rise 25%. That's basic mathematics. 

Yes. If you sell. My point was 1 year you can be up, one year you can be down. 

Hence why everyone says hold onto stock for the long term. 5+ years to ride any bumps along the road.

Holding collective investments for the long term yes. Individual shares I'd say generally not. Company fortunes wax and wane rapidly. The markets will have the news well before retail investors ever do. Providing no opportunity to react. Actively trading shares requires one to be both watchful and nimble. Also not greedy. 

Why are they any different. Imagine someone who had bought Amazon shares. Or Apple shares. Or Tesla shares years ago. You'd have been telling them at the first loss sell up quick and take the hit.

Today they would have been coming here looking your blood.

The differences are volatility and risk.

The OP is in the classic conundrum of when to sell and when to stick or buy. If the OP has confidence in the stocks they bought the drop in price could be a buying opportunity and if they don't have confidence then why buy the share in the first place. If nothing has changed except the price then buy more.

The fact is that most retail investors cannot, and should not, research individual stocks in the depth required to make any really sensible decision. So they buy on what they last read in the newspaper, hear on TV or down the pub, or on a tip from a friend or purely on a whim. So individual stocks should be avoided and the regular investor should build a simple diversified portfolio using multi-asset funds and/or some sector investment funds. They should also have a simple rebalancing strategy that takes all the emotion out of buying and selling. Do that for 30 years are you will be ok.

S&P 500 Vanguard was at 49 before Covid. Dropped to like 38. Imagine thinking I've backed the wrong horse and selling only for a year or two later it sitting at 67.

That's not 1 individual share. You buy stock you hold for more than 1 year unless you're broke and need the money. 

That's what 99% of the advice on this board is. Buy and leave. The OP has bought. Now he should leave and not be reacting to seeing red for 1 year.

Thrugelmir

Retireby40 said:

bostonerimus said:

Retireby40 said:

Thrugelmir said:

Retireby40 said:

Thrugelmir said:

Retireby40 said:

DiamondLil said:

The op's first sentence reads "Over the past 12 months I've started investing in stocks using trading 212."

Not sure why posters arguing the point with @Retireby40 who states nothing more than that stated everywhere on this forum - investing is for the long term and not recommended for periods any shorter than five years, preferably ten years.

He/she is suggesting exactly the mantra repeated on here every day that 12 months is not long enough to make a judgement.

Thanks. That's exactly my point. There's going to be years where you are down 20%. Other years up 20%. It seems to me that the OP has probably started investing and feels like he should cut his losses.

When in reality he should probably hold and see what happens down the line.

If you are holding a stock that falls 20% then recovers 20%. You'll still be 4% down. To recover past losses the stock needs to rise 25%. That's basic mathematics. 

Yes. If you sell. My point was 1 year you can be up, one year you can be down. 

Hence why everyone says hold onto stock for the long term. 5+ years to ride any bumps along the road.

Holding collective investments for the long term yes. Individual shares I'd say generally not. Company fortunes wax and wane rapidly. The markets will have the news well before retail investors ever do. Providing no opportunity to react. Actively trading shares requires one to be both watchful and nimble. Also not greedy. 

Why are they any different. Imagine someone who had bought Amazon shares. Or Apple shares. Or Tesla shares years ago. You'd have been telling them at the first loss sell up quick and take the hit.

Today they would have been coming here looking your blood.

The differences are volatility and risk.

The OP is in the classic conundrum of when to sell and when to stick or buy. If the OP has confidence in the stocks they bought the drop in price could be a buying opportunity and if they don't have confidence then why buy the share in the first place. If nothing has changed except the price then buy more.

The fact is that most retail investors cannot, and should not, research individual stocks in the depth required to make any really sensible decision. So they buy on what they last read in the newspaper, hear on TV or down the pub, or on a tip from a friend or purely on a whim. So individual stocks should be avoided and the regular investor should build a simple diversified portfolio using multi-asset funds and/or some sector investment funds. They should also have a simple rebalancing strategy that takes all the emotion out of buying and selling. Do that for 30 years are you will be ok.

S&P 500 Vanguard was at 49 before Covid. Dropped to like 38. Imagine thinking I've backed the wrong horse and selling only for a year or two later it sitting at 67.

That's not 1 individual share. You buy stock you hold for more than 1 year unless you're broke and need the money. 

That's what 99% of the advice on this board is. Buy and leave. The OP has bought. Now he should leave and not be reacting to seeing red for 1 year.

The OP has bought a number of individual shares though. We're not discussing the SP500.  

Thrugelmir

Retireby40 said:

Thrugelmir said:

Retireby40 said:

Thrugelmir said:

Retireby40 said:

DiamondLil said:

The op's first sentence reads "Over the past 12 months I've started investing in stocks using trading 212."

Not sure why posters arguing the point with @Retireby40 who states nothing more than that stated everywhere on this forum - investing is for the long term and not recommended for periods any shorter than five years, preferably ten years.

He/she is suggesting exactly the mantra repeated on here every day that 12 months is not long enough to make a judgement.

Thanks. That's exactly my point. There's going to be years where you are down 20%. Other years up 20%. It seems to me that the OP has probably started investing and feels like he should cut his losses.

When in reality he should probably hold and see what happens down the line.

If you are holding a stock that falls 20% then recovers 20%. You'll still be 4% down. To recover past losses the stock needs to rise 25%. That's basic mathematics. 

Yes. If you sell. My point was 1 year you can be up, one year you can be down. 

Hence why everyone says hold onto stock for the long term. 5+ years to ride any bumps along the road.

Holding collective investments for the long term yes. Individual shares I'd say generally not. Company fortunes wax and wane rapidly. The markets will have the news well before retail investors ever do. Providing no opportunity to react. Actively trading shares requires one to be both watchful and nimble. Also not greedy. 

Why are they any different. Imagine someone who had bought Amazon shares. Or Apple shares. Or Tesla shares years ago. You'd have been telling them at the first loss sell up quick and take the hit.

Today they would have been coming here looking your blood.

Anyone can invest with (unresearched) hindsight.  No shortage of people who attempt to do so and use this limited knowledge in an attempt to project the future. 

Retireby40

Thrugelmir said:

Retireby40 said:

bostonerimus said:

Retireby40 said:

Thrugelmir said:

Retireby40 said:

Thrugelmir said:

Retireby40 said:

DiamondLil said:

The op's first sentence reads "Over the past 12 months I've started investing in stocks using trading 212."

Not sure why posters arguing the point with @Retireby40 who states nothing more than that stated everywhere on this forum - investing is for the long term and not recommended for periods any shorter than five years, preferably ten years.

He/she is suggesting exactly the mantra repeated on here every day that 12 months is not long enough to make a judgement.

Thanks. That's exactly my point. There's going to be years where you are down 20%. Other years up 20%. It seems to me that the OP has probably started investing and feels like he should cut his losses.

When in reality he should probably hold and see what happens down the line.

If you are holding a stock that falls 20% then recovers 20%. You'll still be 4% down. To recover past losses the stock needs to rise 25%. That's basic mathematics. 

Yes. If you sell. My point was 1 year you can be up, one year you can be down. 

Hence why everyone says hold onto stock for the long term. 5+ years to ride any bumps along the road.

Holding collective investments for the long term yes. Individual shares I'd say generally not. Company fortunes wax and wane rapidly. The markets will have the news well before retail investors ever do. Providing no opportunity to react. Actively trading shares requires one to be both watchful and nimble. Also not greedy. 

Why are they any different. Imagine someone who had bought Amazon shares. Or Apple shares. Or Tesla shares years ago. You'd have been telling them at the first loss sell up quick and take the hit.

Today they would have been coming here looking your blood.

The differences are volatility and risk.

The OP is in the classic conundrum of when to sell and when to stick or buy. If the OP has confidence in the stocks they bought the drop in price could be a buying opportunity and if they don't have confidence then why buy the share in the first place. If nothing has changed except the price then buy more.

The fact is that most retail investors cannot, and should not, research individual stocks in the depth required to make any really sensible decision. So they buy on what they last read in the newspaper, hear on TV or down the pub, or on a tip from a friend or purely on a whim. So individual stocks should be avoided and the regular investor should build a simple diversified portfolio using multi-asset funds and/or some sector investment funds. They should also have a simple rebalancing strategy that takes all the emotion out of buying and selling. Do that for 30 years are you will be ok.

S&P 500 Vanguard was at 49 before Covid. Dropped to like 38. Imagine thinking I've backed the wrong horse and selling only for a year or two later it sitting at 67.

That's not 1 individual share. You buy stock you hold for more than 1 year unless you're broke and need the money. 

That's what 99% of the advice on this board is. Buy and leave. The OP has bought. Now he should leave and not be reacting to seeing red for 1 year.

The OP has bought a number of individual shares though. We're not discussing the SP500.  

People were using individual shares as an example. The same can be used for anything. S&P 500 as well. Imagine he had knvested at 49....seen drop to 38 and thought let's sell.

If the shares he brought were sitting at even or in slight profit would he think the same? No. He is being reactionary because of the red

Retireby40

Hopefully the OP tells us what shares they bought so we can revisit this in a year or two. I doubt they will though. 

london21

Depends on the quality of shares OP bought.
If penny stocks for example sell and move onto lower risk funds.

Hopefully OP have learned and would use the better knowledge to pick better investments going forward.

Many have made investment mistakes and gone on to make better investments/returns. 

adindas

As explained, by others you can't claim against income tax. But you can offset against capital gains.

About selling it just because you are down £3,700 out of £12,000 make sure that this is what you really want to do. It is about 31% down which could or could not be significant depending of the type of the stock you are investing.

As you said you have invested higher risk US tech stocks in the last 12 month up to November. Since March 2021 until mid December this year, vast majority of high growth stocks had been beaten down. But 2020 was a very good year for high growth stocks.

It is only you could make that decision as no one knows what stocks you are investing. Down 31% for high growth stock, high volatility  seems quite high but it is not uncommon and it has not been in the extreme side (differentiate it with blue chip value stock).

For high growth stock it is not uncommon they are down 30%+ within a few months but similarly, it could also up 50%+ during the same period. Some good examples are investing in company in disruptive innovation, high growth stock such as Tesla, Nio (or other good EV stocks), Activision Blizzard, Paypal, Sofi, Square, Teladoc, Zoom, Fiverr, Twitter, Palantir etc

For that reason, for the stock like this many literatures have suggested to set a stop loss lower than your average price for a fractional number of the shares you own or all of them. Also, the entry point is important so you do not buy it when they are around the peak and only buy in small quantity and keep dollar cost averaging it when there is an opportunity. Doing this you will only make a small loss, not 30%+.

If the stop loss is ever triggered, you might still re-enter them at a lower price in the later date if you still believe in that stock. This will keep your price average lower. You might miss to re-enter at a lower price as the stock might be having a price break out, making a sharp move. But if it ever happens, just look for another opportunity in the market. If you just want to stick to the same stock, you could also wait until another pull back/dip due to bad news, market correction, missing the earning expectation, etc.

But some stocks like P&D penny stocks are fundamentally bad, the only things that could move the price up is hype, another pump.  The choice are, hoping another pump to drive the stock price up, cut your lose at the current price or loss all of your money. For the stock like this it is probably better to just cut your loss, move on and look for another opportunity.

Whatever you want to do, make sure that you have done your full DDs and make sure that that is what you want to do. To start with you could see how many institutional investors are selling it at the current price, what is the analyst price target is it still higher than your average price??

bostonerimus

Retireby40 said:

Thrugelmir said:

Retireby40 said:

bostonerimus said:

Retireby40 said:

Thrugelmir said:

Retireby40 said:

Thrugelmir said:

Retireby40 said:

DiamondLil said:

The op's first sentence reads "Over the past 12 months I've started investing in stocks using trading 212."

Not sure why posters arguing the point with @Retireby40 who states nothing more than that stated everywhere on this forum - investing is for the long term and not recommended for periods any shorter than five years, preferably ten years.

He/she is suggesting exactly the mantra repeated on here every day that 12 months is not long enough to make a judgement.

Thanks. That's exactly my point. There's going to be years where you are down 20%. Other years up 20%. It seems to me that the OP has probably started investing and feels like he should cut his losses.

When in reality he should probably hold and see what happens down the line.

If you are holding a stock that falls 20% then recovers 20%. You'll still be 4% down. To recover past losses the stock needs to rise 25%. That's basic mathematics. 

Yes. If you sell. My point was 1 year you can be up, one year you can be down. 

Hence why everyone says hold onto stock for the long term. 5+ years to ride any bumps along the road.

Holding collective investments for the long term yes. Individual shares I'd say generally not. Company fortunes wax and wane rapidly. The markets will have the news well before retail investors ever do. Providing no opportunity to react. Actively trading shares requires one to be both watchful and nimble. Also not greedy. 

Why are they any different. Imagine someone who had bought Amazon shares. Or Apple shares. Or Tesla shares years ago. You'd have been telling them at the first loss sell up quick and take the hit.

Today they would have been coming here looking your blood.

The differences are volatility and risk.

The OP is in the classic conundrum of when to sell and when to stick or buy. If the OP has confidence in the stocks they bought the drop in price could be a buying opportunity and if they don't have confidence then why buy the share in the first place. If nothing has changed except the price then buy more.

The fact is that most retail investors cannot, and should not, research individual stocks in the depth required to make any really sensible decision. So they buy on what they last read in the newspaper, hear on TV or down the pub, or on a tip from a friend or purely on a whim. So individual stocks should be avoided and the regular investor should build a simple diversified portfolio using multi-asset funds and/or some sector investment funds. They should also have a simple rebalancing strategy that takes all the emotion out of buying and selling. Do that for 30 years are you will be ok.

S&P 500 Vanguard was at 49 before Covid. Dropped to like 38. Imagine thinking I've backed the wrong horse and selling only for a year or two later it sitting at 67.

That's not 1 individual share. You buy stock you hold for more than 1 year unless you're broke and need the money. 

That's what 99% of the advice on this board is. Buy and leave. The OP has bought. Now he should leave and not be reacting to seeing red for 1 year.

The OP has bought a number of individual shares though. We're not discussing the SP500.  

People were using individual shares as an example. The same can be used for anything. S&P 500 as well. Imagine he had knvested at 49....seen drop to 38 and thought let's sell.

If the shares he brought were sitting at even or in slight profit would he think the same? No. He is being reactionary because of the red

Indeed we are comparing apples and oranges. There is volatility in all investments, but it's the degree of that volatility which must be considered. I hope you can discern the difference between an S&P500 fund and a single S&P500 stock when it comes to risk. I gave the OP some things to consider. Unfortunately it seems like they have done what many people do and invested without a strategy to navigate losses and gains. The lack of diversity in the OP's purchases limits their options slightly and the worst time to develop such a strategy is when you are reacting to losses or sitting smugly on gains.

Thrugelmir

Retireby40 said:

Thrugelmir said:

Retireby40 said:

bostonerimus said:

Retireby40 said:

Thrugelmir said:

Retireby40 said:

Thrugelmir said:

Retireby40 said:

DiamondLil said:

The op's first sentence reads "Over the past 12 months I've started investing in stocks using trading 212."

Not sure why posters arguing the point with @Retireby40 who states nothing more than that stated everywhere on this forum - investing is for the long term and not recommended for periods any shorter than five years, preferably ten years.

He/she is suggesting exactly the mantra repeated on here every day that 12 months is not long enough to make a judgement.

Thanks. That's exactly my point. There's going to be years where you are down 20%. Other years up 20%. It seems to me that the OP has probably started investing and feels like he should cut his losses.

When in reality he should probably hold and see what happens down the line.

If you are holding a stock that falls 20% then recovers 20%. You'll still be 4% down. To recover past losses the stock needs to rise 25%. That's basic mathematics. 

Yes. If you sell. My point was 1 year you can be up, one year you can be down. 

Hence why everyone says hold onto stock for the long term. 5+ years to ride any bumps along the road.

Holding collective investments for the long term yes. Individual shares I'd say generally not. Company fortunes wax and wane rapidly. The markets will have the news well before retail investors ever do. Providing no opportunity to react. Actively trading shares requires one to be both watchful and nimble. Also not greedy. 

Why are they any different. Imagine someone who had bought Amazon shares. Or Apple shares. Or Tesla shares years ago. You'd have been telling them at the first loss sell up quick and take the hit.

Today they would have been coming here looking your blood.

The differences are volatility and risk.

The OP is in the classic conundrum of when to sell and when to stick or buy. If the OP has confidence in the stocks they bought the drop in price could be a buying opportunity and if they don't have confidence then why buy the share in the first place. If nothing has changed except the price then buy more.

The fact is that most retail investors cannot, and should not, research individual stocks in the depth required to make any really sensible decision. So they buy on what they last read in the newspaper, hear on TV or down the pub, or on a tip from a friend or purely on a whim. So individual stocks should be avoided and the regular investor should build a simple diversified portfolio using multi-asset funds and/or some sector investment funds. They should also have a simple rebalancing strategy that takes all the emotion out of buying and selling. Do that for 30 years are you will be ok.

S&P 500 Vanguard was at 49 before Covid. Dropped to like 38. Imagine thinking I've backed the wrong horse and selling only for a year or two later it sitting at 67.

That's not 1 individual share. You buy stock you hold for more than 1 year unless you're broke and need the money. 

That's what 99% of the advice on this board is. Buy and leave. The OP has bought. Now he should leave and not be reacting to seeing red for 1 year.

The OP has bought a number of individual shares though. We're not discussing the SP500.  

People were using individual shares as an example. The same can be used for anything. S&P 500 as well. Imagine he had knvested at 49....seen drop to 38 and thought let's sell.

If the shares he brought were sitting at even or in slight profit would he think the same? No. He is being reactionary because of the red

The red will reflect the broader market view of the stock. Somebody has to be last to the party and end up on the wrong side of the trade. As to buy a stock somebody else has to sell. For every winner there's a loser. Trading isn't a one sided activity. 

Retireby40

Thrugelmir said:

Retireby40 said:

Thrugelmir said:

Retireby40 said:

bostonerimus said:

Retireby40 said:

Thrugelmir said:

Retireby40 said:

Thrugelmir said:

Retireby40 said:

DiamondLil said:

The op's first sentence reads "Over the past 12 months I've started investing in stocks using trading 212."

Not sure why posters arguing the point with @Retireby40 who states nothing more than that stated everywhere on this forum - investing is for the long term and not recommended for periods any shorter than five years, preferably ten years.

He/she is suggesting exactly the mantra repeated on here every day that 12 months is not long enough to make a judgement.

Thanks. That's exactly my point. There's going to be years where you are down 20%. Other years up 20%. It seems to me that the OP has probably started investing and feels like he should cut his losses.

When in reality he should probably hold and see what happens down the line.

If you are holding a stock that falls 20% then recovers 20%. You'll still be 4% down. To recover past losses the stock needs to rise 25%. That's basic mathematics. 

Yes. If you sell. My point was 1 year you can be up, one year you can be down. 

Hence why everyone says hold onto stock for the long term. 5+ years to ride any bumps along the road.

Holding collective investments for the long term yes. Individual shares I'd say generally not. Company fortunes wax and wane rapidly. The markets will have the news well before retail investors ever do. Providing no opportunity to react. Actively trading shares requires one to be both watchful and nimble. Also not greedy. 

Why are they any different. Imagine someone who had bought Amazon shares. Or Apple shares. Or Tesla shares years ago. You'd have been telling them at the first loss sell up quick and take the hit.

Today they would have been coming here looking your blood.

The differences are volatility and risk.

The OP is in the classic conundrum of when to sell and when to stick or buy. If the OP has confidence in the stocks they bought the drop in price could be a buying opportunity and if they don't have confidence then why buy the share in the first place. If nothing has changed except the price then buy more.

The fact is that most retail investors cannot, and should not, research individual stocks in the depth required to make any really sensible decision. So they buy on what they last read in the newspaper, hear on TV or down the pub, or on a tip from a friend or purely on a whim. So individual stocks should be avoided and the regular investor should build a simple diversified portfolio using multi-asset funds and/or some sector investment funds. They should also have a simple rebalancing strategy that takes all the emotion out of buying and selling. Do that for 30 years are you will be ok.

S&P 500 Vanguard was at 49 before Covid. Dropped to like 38. Imagine thinking I've backed the wrong horse and selling only for a year or two later it sitting at 67.

That's not 1 individual share. You buy stock you hold for more than 1 year unless you're broke and need the money. 

That's what 99% of the advice on this board is. Buy and leave. The OP has bought. Now he should leave and not be reacting to seeing red for 1 year.

The OP has bought a number of individual shares though. We're not discussing the SP500.  

People were using individual shares as an example. The same can be used for anything. S&P 500 as well. Imagine he had knvested at 49....seen drop to 38 and thought let's sell.

If the shares he brought were sitting at even or in slight profit would he think the same? No. He is being reactionary because of the red

The red will reflect the broader market view of the stock. Somebody has to be last to the party and end up on the wrong side of the trade. As to buy a stock somebody else has to sell. For every winner there's a loser. Trading isn't a one sided activity. 

Yes and he sells now, someone picks up his shares 30% cheaper and with more patience makes profit. 

Listen you would never encourage someone to invest for only a 12 month period of time. We are going round in circles.

Investing is for the long term. 12 months is not enough.